Search form

Search form

Economic recovery will not occur in a smooth, upward motion, economists say. In the third quarter, which ends today, economists expect GDP to have grown at a 3% rate, the fastest in two years -- this helps to explain why the stock market has risen sharply. Growth will be a slower 2.5% in the fourth quarter, economists predict, because the government's "Cash for Clunkers" program and the tax credits for first-time home buyers were important growth drivers. Growth could be as slow as 1.5% in the fourth quarter, some economists say, and the stock market could also slow if economic data turn out poorer than expected.

Related Summaries

The U.S. economic recovery is driven mostly by the government's stimulus, putting continued growth in doubt, economists said. Weekly unemployment claims topped expectations, manufacturing is slowing down, consumer-loan delinquencies are at a historic high and car sales fell off after "Cash for Clunkers" ended. "It is a warning not to take the near-term strength of the economic recovery for granted," said Paul Dales, U.S. economist at Capital Economics.

The S&P/Case-Shiller Composite Index, which gauges housing prices, rose 1.6% in July compared with the previous month, largely surpassing economists' forecasts. The index rose 1.4% in June. But this indication of economic recovery was overshadowed by a drop in consumer confidence. The Conference Board's index dropped to 53.1 this month from a revised 54.5 in August. The high unemployment rate worried consumers most. "While not as pessimistic as earlier this year, consumers remain quite apprehensive about the short-term outlook and their incomes," said Lynn Franco, director of The Conference Board's Consumer Research Center.

Economic recovery will not occur in a smooth, upward motion, economists say. In the third quarter, which ends today, economists expect GDP to have grown at a 3% rate, the fastest in two years -- this helps to explain why the stock market has risen sharply during the period. Growth will be a slower 2.5% in the fourth quarter, economists predict, as the government's "Cash for Clunkers" program and the tax credits for first-time home buyers were important growth drivers. Growth could be as slow as 1.5% in the fourth quarter, some economists say, and the market could also slow its current rally if economic data turn out poorer than expected.

The International Monetary Fund said banks worldwide have yet to disclose all of their likely losses as a result of the financial crisis and economic downturn. The IMF lowered its estimate of total losses, reflecting an improved economic outlook and increasing confidence in the financial market. However, the IMF said recovery is not ensured and more needs to be done to prevent another downward lurch in the economy.

With economic recovery on the way, companies are seeking chief financial officers who have strategic experience and who can drive value, a panel of recruiters said. Another quality sought is the ability to communicate and interact with all interlocutors -- the board of directors, investors, credit rating agencies and Wall Street. CFOs are not changing companies as often as they did in the past, and there are many looking for a job.